Which of the following is an example of a two-part tariff?
A) Higher sales tax on specific products.
B) Price discrimination based on the buyers' willingness to pay.
C) A regulated firm uses marginal cost pricing for some customers and average cost pricing for other customers.
D) Charging a connection fee plus a monthly charge equal to marginal cost.
E) Different prices based on the cost of production and quantity bought.

Question

Quizplus · Accepted Answer

In a two-part tariff, there is a fixed fee (like a connection fee) and a variable fee (like a monthly charge) based on usage. Charging a connection fee plus a monthly charge equal to marginal cost is an example of a two-part tariff.

Which of the Following Is an Example of a Two-Part